Executive Summary
Growth in crypto-currencies trading creates new markets and opportunities for generating income and diversifying portfolios
Financing of crypto-currency transactions is one of these new opportunities which allows to receive a high fixed income in US dollars, participating in the funding of crypto-currency transactions
The Financial Engineer Digital Assets Fund (FEDAF) – is a hedge fund specialized in the financing of crypto-currency transactions, whose strategy is aimed at obtaining a fixed income in US dollars
The fund is created in the most popular jurisdiction for hedge funds – the Cayman Islands – distinguished by developed regulation and financial legislation to protect the interests of investors
FEDAF is managed by the licensed Singapore investment company Financial Engineer Pte. Ltd, whose team has many years of experience in asset management in international financial markets
The fund’s administrator is IFINA International Financial Administration, and the auditor is the international auditing firm Baker Tilly
The income of the fund is formed by money lending activity on crypto-currency markets as well as by arbitrage operations with crypto-currency derivatives
Fund Strategy

Flexible Crypto Exchange

Crypto-currency exchanges provide traders with an opportunity to make transactions using borrowed funds. At the same time, participants who have free cash can provide such loans on a short-term basis (1-2 days, on average)

Rate of Funding

The rates for funding operations are determined by the demand and supply and can be in the range from 10 to 300% per annum (on average, about 30% per annum)

Daily Financial Operations

The Fund finances such operations on a regular basis at several major cryptocurrency exchanges, which allows it to receive a stable interest income

Low Risk

Since loans are provided by the Fund in US dollars, the Fund’s assets are not at risk of high volatility like crypto currencies themselves

P2P margin trade lending

Available at: Bitfinex

  • P2P loans provided to those who wants to trade with leverage, exchange controls risks
  • Open market with bids and offers
  • Short lending periods (form several hours to several days)
  • Rates defined by the market (supply and demand)
  • Rates historically ranged from 3% p.a. to 300% p.a. in the periods of aggressive crypto growth
  • Works best if automated (lending controlled 24/7 by trading software)
Derivative Hedge

Available at: Bitmex, Cryptofacilities,  Deribit

  • We hold long position in Bitcoins and hedge it via perpetual inverse BTC/USD swap
  • Bitmex swap is a derivative contract which pay difference between USD and BTC money market rates
  • Shorting it we, economically speaking, lend USD and borrow BTC
  • Rates defined by the market (supply and demand)
  • Rate can be positive or negative, but USD lending rate is dominantly larger than BTC rate
  • Free BTC can also be provided to lending to boost performance
Interest Rate Arbirtrage

Available at: Different combinations e.g. Bitmex/Bitfinex

  • P2P loans provided to those who wants to trade with leverage, exchange controls risks
  • Open market with bids and offers
  • Short lending periods (form several hours to several days)
  • Rates defined by the market (supply and demand)
  • Rates historically ranged from 3% p.a. to 300% p.a. in the periods of aggressive crypto growth
  • Works best if automated (lending controlled 24/7 by trading software)
Strategy Return and Risks
Total target annual income in USD, %

20%-25%

Net income of the investor in USD, %

15%-17%

Manager's fee

Management fee: 2% of assets per year
Success fee: From 0 to 30% of the fund's income

Risk

Management fee: 2% of assets per year
Success fee: From 0 to 30% of the fund's income

Organizational structure of the fund FEDAF

Contact Us

Fund Manager:

Financial Engineer

Alexander Burdakov
fedaf@fin-engineer.com